HMRC is writing to taxpayers it believes should repay some of the self-employment income support scheme grant they received. Might this affect you and what should you do if you receive a letter?
SEISS recap. In 2021 HMRC worked out if and how much fourth and fifth self-employment income support scheme (SEISS) grants an individual was entitled to based on the business profits they declared in their tax returns for the years 2016/17 to 2019/20. The calculations were made on 2 March 2021. Subsequent amendments made by the taxpayer or HMRC that alter the figures on those returns might also affect the entitlement to SEISS payments.
Warning letter. HMRC has identified individuals whose entitlement to the SEISS grants has reduced by more than £100. It’s now in the process of writing to them. The letter includes a formal assessment for repayment of the excess grant. It also shows how the amount being demanded has been worked out. Note that only the fourth and fifth SEISS grants are affected by HMRC’s recalculations.
Trap. If your business profits shown on the returns for the years we’ve mentioned require amendment, you must to tell HMRC and repay any SEISS grant overpaid. You should not wait for HMRC to contact you.
Assessment accepted. If you receive a letter and accept HMRC’s calculations, you must pay the amount demanded. The assessment will show a payment reference (it starts with an “X”) and includes instructions on the various methods you can pay by. Tip. If you need more time to pay call HMRC on 0300 322 9497 within the 30-day period.
Trap. If you don’t pay the assessment within 30 days you’ll be liable to a penalty which will be equal to 5% of the amount of the assessment.
Assessment not accepted. If you don’t agree with HMRC’s figures you have 30 days from the date of the assessment (letter) in which your appeal must reach HMRC. Instructions on how to appeal are given in the letter. When appealing you should provide your alternative to HMRC’s calculations with your appeal.
You’re affected if the profits reported on your tax returns for 2016/17 to 2019/20 have been amended since 2 March 2021. You must either pay the amount demanded or appeal against the figures within 30 days.
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